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Restaurant, Bar, and Club Profitability

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How to run a more profitable business

Income Is Not the Same as Profit

When the front of the house is full and the kitchen is just short of being backed up, it’s easy to think you’re making money as you watch the cashier process ticket after ticket. And the truth is: you probably are making money; but, it’s not how much you make that counts , it’s how much you get to keep.

The secret to managing with a goal of profitability is to achieve the perfect balance between overhead costs and sales. This may sound easier said than done, but it actually is relatively easy to achieve if you understand and implement specific financial management skills. Restaurant managers are not accountants, nor should they be expected to be. However, they are the people whose decisions have the most ability to impact a restaurant’s bottom line and managers do need to have access to the tools and technology necessary to get the job done.

Controlling Profitability

Controlling profitability can be relatively easy to achieve if you understand and implement specific financial management skills. Food/beverage costs and labor are the two highest controllable costs for any restaurant, regardless of size. Since food costs can consume as much as 33% or more of every sales dollar, it is important to have systems in place that address portion control, inventory management, waste, prep and pull procedures, comp and coupon control, and more.

Using quantitative as well as qualitative measurements enable restaurant managers to keep their fingers on the financial pulse of the business, while never losing sight of the service quality or customer and employee satisfaction levels. It is equally important for managers to know the percentage of each dollar of revenue that is consumed by labor costs and how to control those labor costs by using available labor metrics. Of course, knowing your labor costs and controlling them are two entirely different subjects. That is why it is also necessary for managers to be scheduling experts with the skills and abilities needed to balance service quality standards and customer experience against the costs of operating the business effectively and profitably.

How long does it take to make an employee schedule? It should take less than 5 minutes! Did you know that labor costs could be as much as 30% of your expenses? TimeForge can help streamline and minimize labor costs through effective employee scheduling at your restaurant, bar, or club.

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